Tax invoices done right

What a tax invoice must show

The ATO says a tax invoice must make these things clear:

1. that it's meant to be a tax invoice — use the words “Tax invoice”
2. who you are (your business name)
3. your ABN
4. the date you issued it
5. a short description of what you sold, with the quantity (if it applies) and price
6. the GST amount. Show it separately, or, if GST is exactly one-eleventh of the total, write “Total price includes GST”.
7. which items are taxable, if some aren't

For sales of $1,000 or more, it must also show the buyer's identity or their ABN.

When you have to give one

• If a customer asks for a tax invoice, you must give one within 28 days. The exception is a sale of $82.50 or less, including GST.
• A PDF by email is fine, as long as it has everything above.
• Not registered for GST? Don't call it a tax invoice. Just call it an “Invoice”.
• An invoice that's wrong or missing details isn't a valid tax invoice. If your client asks, send a correct one to replace it.

Payment terms that get you paid

• Put your payment terms in your contract and on every invoice: how to pay, when payment is due, and what happens if it's late.
• Show an actual due date, not just “30 days”.
• If you want to charge interest on late payments, put it in your contract first.
• Make paying easy: bank details, a payment reference, and a card option if you can.

On construction contracts, Security of Payment laws in some states cap how long payment terms can be. In Victoria, for example, payment terms are capped at 20 business days from 15 April 2026. See Security of Payment.

Footing invoices are headed “Tax invoice” and show the GST. If you've connected card payments, the invoice can include a Pay invoice button.

Progress invoices and progress claims

On staged jobs, you bill as you go. A progress claim (a payment claim) and a tax invoice can be the same document if it has everything both need. In Queensland, for example, the QBCC says your usual tax invoice can work as a payment claim if it identifies the work, states the amount and asks for payment.

Some builders send the claim first, then the tax invoice once the amount is agreed. Either way, be consistent, and make it clear which document is which.

Watch the GST timing. On a cash basis, you report GST in the period you get paid. On a non-cash (accruals) basis, you report it in the period you issue the tax invoice or get paid, whichever comes first. That means an invoice can create a GST bill before the money arrives. For progress payments on a construction contract, each payment is treated as a separate sale.

Show retention clearly

If your contract lets the client hold retention (money kept back as security for defects), show it on every claim or invoice:

• the full amount for the work this period
• the retention held this time
• the total retention held so far
• the amount payable now

Track when it's due back, as your contract says. In Queensland, if the contract doesn't set a defects liability period, retention must be released 12 months after practical completion.

How GST applies to retention depends on how you account for GST. Ask your accountant or BAS agent.

Keep the records

By law, you need to keep most business records, including invoices, for at least 5 years. Paper or electronic copies are both fine.

Next: create and send an invoice.

Sources

Checked September 2026. Rules change, and they differ between states. This is general information, not legal or tax advice.

• ATO — Tax invoices
• business.gov.au — How to invoice
• business.gov.au — Payment terms
• ATO — Choosing an accounting method for GST
• ATO — Progressive or periodic sales and purchases
• QBCC — Request payment
• QBCC — Retentions and securities
• Building and Plumbing Commission (Vic) — Changes to the SOP Act

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